Cardinal Health, a provider of healthcare products and services, today announced plans for a tax-free spin-off of its clinical and medical products businesses as a separate public company that will be led by its current vice chairman David L. Schlotterbeck.
The spin-off is anticipated to be completed by the middle of calendar 2009, Cardinal said.
The company also reported that Chairman and CEO R. Kerry Clark will continue to lead Cardinal through the spin-off and then will retire from the company. Clark will be succeeded by George S. Barrett, who has served as vice chairman and CEO of healthcare supply chain services since joining Cardinal in January. Barrett has more than 25 years of experience in the healthcare industry, most recently serving as president and CEO of North America for Teva Pharmaceuticals.
The spin-off of the clinical and medical products businesses will create a new company headquartered in San Diego, which will offer products that include the Alaris IV infusion and Pyxis dispensing systems, Avea and LTV series ventilators, V. Mueller surgical instruments, and clinically differentiated offerings to reduce hospital-acquired infections through MedMined services and ChloraPrep preoperative skin preparation, according to Cardinal.
In addition, the company said that founder Robert D. Walter will retire from its board of directors by not standing for re-election when his term expires on Nov. 5, following the company’s annual meeting of shareholders. He will continue to serve as an adviser to the company.
Schlotterbeck joined Cardinal in 2004 through its acquisition of Alaris Medical Systems, where he was president and CEO. Prior to Alaris, he was president and chief operating officer (COO) of Pacific Scientific, president and CEO of Vitalcom and executive vice president and chief operating officer of Nellcor. He currently serves as vice chairman and CEO of clinical and medical products for Cardinal.
Dwight Winstead, current president of the clinical and medical products group, will be named COO, reporting to Schlotterbeck. An external search has been launched to select a chief financial officer for the new company, he noted.
The proposed spin-off will be accomplished through a pro rata distribution to Cardinal shareholders, the company said. Completion of the spin-off is subject to final approval by Cardinal’s board of directors, confirmation of the tax-free nature of the transaction, as well as effectiveness of a Form 10 registration statement to be filed with the U.S. Securities and Exchange Commission. Cardinal expects to file its Form 10 during the company’s fiscal third quarter and will include detailed information about the new medical technology company, the spin-off and related matters.
Cardinal will continue to be headquartered in Dublin, Ohio.